Sarine’s revenues drop 50% in Q1

Sarine Technologies Ltd. announced its financial results for the first quarter ended 31 March 2015. It recorded a 50 percent decrease in revenue to US $12.2 million, with lower sales of diamond manufacturing equipment and GalaxyTM - related income. Net profit decreased to US$0.9 million in the said quarter.

The company attributes the fall to the challenges experienced by the diamond manufacturing industry which started in late 2014 have persisted into the current financial year. Business sentiments were dampened by ongoing issues, primarily squeezed manufacturer margins due to high rough diamond prices relative to polished prices and weaker consumer demand across most markets outside the United States, as well as limited credit availability for second and third - tier Indian diamond manufacturers.

Gross profit fell 55 percent to US $ 8.0 million, with a reduced gross profit margin of 66 percent. Overall recurring income declined approximately 20 percent and accounted for just over half of Q1 2015 revenue.

Total installed base of GalaxyTM family systems rose to 195 as the Group delivered 5 systems, primarily GalaxyTM Ultras, to customers and service centres during the quarter. In order to support the launch of new products, such as Sarine ProfileTM, and establish essential sales and marketing infrastructures for the Group’s new polished diamond services and product offerings, additional sales and marketing expenses were incurred during the quarter.

“Despite the prevailing challenging business conditions in the immediate term, the Group remains optimistic about the prospects of our new products and services based on Sarine LightTM and Sarine LoupeTM. In view of the increasing popularity of digital trade visualisation solutions to complement traditional marketing methods, both online and in stores, we continue to expect growing demand for these technologies from manufacturers, gemological laboratories, wholesale and retail traders across the polished diamond value chain in 2015,” commented Mr. Uzi Levami, Chief Executive Officer of the Group.